Gov. Dayton says state's bid for Amazon HQ to be 'restrained'

Richard Drew, Associated PressFILE - In this Tuesday, May 30, 2017, file photo, the Amazon logo is displayed at the Nasdaq MarketSite, in New York's Times Square. Amazon announced Thursday, Sept. 7, that it has opened the search for a second headquarters, promising to spend more than $5 billion on the opening. (AP Photo/Richard Drew, File)

Gov. Mark Dayton said Tuesday that any offer to lure Amazon to Minnesota using state tax dollars would be “restrained” given the importance of local companies Target and Best Buy, which are both competitors to the online retailing giant.

Calling Target and Best Buy “two of our major, important companies,” Dayton noted that it could be a tough sell to hand “tax dollars and special incentives” to Amazon that those two, homegrown companies don’t receive. The DFL governor said he called the Target and Best Buy CEOs last week to reassure them that he understands their importance to Minnesota.

Dayton’s caveats underscore the complexities — both political and economic — of attempts to lure Seattle-based Amazon to build a second headquarters here.

Unlike other regions that may be desperate to draw a company with Amazon’s money and reach, Minnesota is already home to 17 Fortune 500 companies in a diverse set of industries, including retail, manufacturing, food processing and financial services. Each has thousands of employees, and the political clout to protect their interests.

“Our number one focus should be keeping the terrific businesses we have here,” said Charlie Weaver, the executive director of the Minnesota Business Partnership, which represents the state’s largest companies. “Would it be a great thing for Minnesota if Amazon decided to come here for Minnesota? Yes, but let’s carefully consider the cost.”

“If you look at what other states are doing, you have to question whether the juice is worth the squeeze,” Weaver, a one-time chief of staff to former Gov. Tim Pawlenty, who still counsels prominent Minnesota Republicans, said of expensive incentive packages to draw companies.

Dayton: “I did call Target and Best Buy CEOs ... and wanted them to know they are very important companies and major employers.”

In his calls to the Target and Best Buy CEOs, Dayton said he tried to assuage any anxieties about Minnesota’s recruiting effort.

“I did call Target and Best Buy CEOs on my own initiative and wanted them to know they are very important companies and major employers,” Dayton said. Both companies, which together employ 34,000 Minnesotans, expressed concern about using tax dollars from their companies and workers to attract a competitor to Minnesota, Dayton said.

Dayton has asked his Department of Employment and Economic Development (DEED) to assemble a proposal for Amazon.

He said no determinations about financial inducements have been made. He said Minnesota would be an attractive landing spot for Amazon in any case.

“We think we have a strong case to make because the first and foremost consideration is the quality of the people they would be able to hire,” he said.

DEED and Greater MSP, which is the region’s economic development agency, are working on the region’s single proposal, which is due Oct. 19.

Amazon specified it would only consider metropolitan areas with more than a million residents; in Minnesota, only the Twin Cities area reaches that threshold.

Cities in the region will approve potential Amazon sites from developers and other interested land owners. Greater MSP is vetting and curating potential sites.

Minnesota’s bid will be unknown to the public for some time, according to Amazon’s rules. The company’s instructions include the following: “Amazon will deliver a confidentiality and nondisclosure agreement for execution at the appropriate time.”

With as many as 50,000 jobs and $5 billion in construction investment, Minnesota’s elected officials are mostly bullish on bringing Amazon here.

Rep. Paul Thissen, DFL-Minneapolis, a candidate for governor, released a statement within hours of Amazon’s announcement in support of an effort to bring the firm here.

Senate Majority Leader Paul Gazelka, R-Nisswa, sent a letter to Dayton’s economic development commissioner expressing his enthusiasm to land Amazon:

“Minnesotans are counting on you to make a strong case that we have the finest workforce in North America and Amazon’s opportunity to succeed here is unrivaled. We stand ready to help — let’s bring this great company to Minnesota.”

But some opposition to any subsidies or incentives has started to emerge.

“I respectfully disagree with Gov. Dayton’s planned participation in the ‘Amazon sweepstakes,’ ” said Rep. Tina Liebling, DFL-Rochester, another candidate for governor. “We should not and need not offer tax breaks to huge corporations that give them further advantages over Main Street businesses.”

A weekend Facebook post from Minneapolis Mayor Betsy Hodges, who is in a tough re-election battle, illustrated the political risks of an Amazon bid.

By the numbers

Amazon says its second HQ could bring more than $5 billion in construction over 15 to 17 years:

Phase 1: Up to 1 million square feet at a cost of $600 million

Phase 2: Up to 2 million square feet at a cost of $1.26 billion

Phase 3: Up to 3 million square feet at a cost of $1.98 billion

Rather than endorse any effort to lure the company, Hodges wrote that she has spent time talking to business leaders and city staff about “what it might mean to Minneapolis to bring Amazon here.”

Hodges also nodded to the region’s existing business titans:

“A big reason that we are strong is because of the great companies that already call Minneapolis and our region home,” she wrote.

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